Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?
The Panama Papers: Here’s What We Know
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Re: The Panama Papers: Here’s What We Know
#12I do not think Mr Cameron will stop his political activity just because Panama Papers reveal that his father was one among those who designed the system.
Agreed provided it's clear that he and his family have not profited from activities shown to be those of tax evasion as against tax avoidance. However he's attacked some folk engaged in the latter (though aren't we all in terms of following the rules to minimize our tax bill?) so he may find that difficult.
Re: The Panama Papers: Here’s What We Know
#13I have a sincere question that may sound hyperbole but worth to discuss in HN: what are the ethical/legal limits of leaks when some of the leakers are the classical media? I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? I will clarify my question to not sound radically stupid: if the Panama Papers had been published anonymously or showing cases of attacks against soci…
The general rule in journalism seems to be that if the information is sufficiently public and there is a sufficient public interest in it, it should be reported on as if it were published legitimately. There's an obvious trade-off between public interest and confidentiality and privacy concerns, of course. I'm not sure what the legal situation is in every country but as I understand it, similar trade-offs exist in Ge…
Isn't there sufficient public interest in having culture available to everyone? I think even the CIA used (or tried to use)culture to overthrow governments and political systems around the world. If Hollywood movies are culture/art is debatable, ofcourse, and maybe that's where lies the problem. People are confusing commercial and political agendas with culture/art, and that's no accident...
Re: The Panama Papers: Here’s What We Know
#14I do not think Mr Cameron will stop his political activity just because Panama Papers reveal that his father was one among those who designed the system.
Agreed provided it's clear that he and his family have not profited from activities shown to be those of tax evasion as against tax avoidance. However he's attacked some folk engaged in the latter (though aren't we all in terms of following the rules to minimize our tax bill?) so he may find that difficult.
There's plenty of hypocrisy to go around, so it may be difficult to find someone to cast the first stone.
Re: The Panama Papers: Here’s What We Know
#15Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?
On the illegal end of things, typically the benefit is three fold, one is that the company obscures the identity of the beneficial owners (simply by not reporting the shareholders), tax evasion - often this being the entity holding the money in a tax free offshore jurisdiction (I.e. It's may be easier and you less likely to get caught evading taxes if a Panamanian trust opens a brokerage account in Hong Kong), and lastly as conduits of illegal gains - money laundering - company a takes illegal money in Mexico, makes a loan to company b in Panama which pays a dividend to company c in the United States (and paying tax on that dividend and deposing the rest in a u.s account to spend freely).
On the legal side there are actually probably more reasons, anonymity being one (I.e. Hiding from your neighbors who just bought the house next door), numerous legal tax avoidance reasons (two common ones would be: 1. Because of the u.s. Tax code (unlike most other places) the u.s. Charges corporate tax on foreign income but only when it is repatriated - so many companies will avoid tax by having offshore subsidiaries that hold IP to keep profits from coming back to the u.s. and being subject to tax (see every big software company with irish subsidiaries or swiss corporate inversions) 2. Hedge fund/private equity business makes extensive use of offshore companies so that non-u.s investors do not become subject to US tax and also so that US non-taxable investors (pensions and universities) do not create inadvetant tax liability for themselves (UBTI in particular)), also simple local compliance i.e. if you are a u.s. citizens and want to buy land in mexico i believe there are certain areas (typically near the coast) where the only way you can do this is to form a mexican entity)
Re: The Panama Papers: Here’s What We Know
#16I have a sincere question that may sound hyperbole but worth to discuss in HN: what are the ethical/legal limits of leaks when some of the leakers are the classical media? I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? I will clarify my question to not sound radically stupid: if the Panama Papers had been published anonymously or showing cases of attacks against soci…
Pithy version: one is interesting to the public, the other is in the public interest.
Re: The Panama Papers: Here’s What We Know
#17Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?
The number one benefit: Privacy. Until, of course, someone steals your private information from your lawyer.
I'm characterizing this "event" as closer to a theft of credit card information than a Snowdon-esque expose of governments. This is a private company who's data was ransacked. Hope the lawyers at that firm are getting ready to be sued by all their private clients.
Re: The Panama Papers: Here’s What We Know
#18The way I understand it, the offshore companies exist for the purpose of funneling money out of "onshore" companies and out of the country.
Extraction of dirty money (from bribery) is also very easy to do with offshore companies.
The third reason is to add confusion about ownership of companies and real estate.
More simply, offshore companies help rich people pay less taxes.
Why do countries permit offshore companies to dominate and rob their economies ? Could anyone explain it to me ?
Wouldn't banning trade with offshore companies have the effect of drastically reduced corruption and illegal "schemes" ?
Edit: By "offshore" I mean companies registered in small island nations or "tax havens".
Re: The Panama Papers: Here’s What We Know
#19I have a sincere question that may sound hyperbole but worth to discuss in HN: what are the ethical/legal limits of leaks when some of the leakers are the classical media? I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? I will clarify my question to not sound radically stupid: if the Panama Papers had been published anonymously or showing cases of attacks against soci…
> I mean what is the difference of a movie leak (e.g torrent share) with a political leak on media? At it's most simple level: a movie leak is a social ill, breaking of the social copyright contract, and a political leak is a social good, revelation of corruptions and education. That's a simplification of course, copyright is abused, for instance to prevent all access to the copyrighted material in some places and fa…
I understand that you're simplifying, but I don't think social ill is the right word. It's more like a social good which is ill for the copyright holder. The question in that case is balancing the benefit to society against the benefits to the company which claims copyright or intellectual property. It's a social good in the sense that public domain is a social good when society can benefit, but also a deeper social good for the society which inspired and produced the copyrighted work because it allows it to be distributed to people in countries that would otherwise not have access to it. For example, perhaps the greatest weapon against anti-Americanism is American culture spread through Hollywood and other media. This would normally not be sold in areas that are hostile to American values, but leaked material penetrates the culture and reverses hostility.
This really comes down to the classic question of whether it's more important to benefit society in general or the rights of property holders. There are people who strongly believe in both extremes and lots of people in the middle. Some say that property is the foundation of freedom and we should sacrifice social good for the promotion of property and others say that the needs of the many outsweigh the needs of the few, even that property is theft of social value. Where any person might stand on these issues is complicated, to say the least.
Re: The Panama Papers: Here’s What We Know
#20Does anyone understand what benefit a wealthy person gets legal or illegal from using a so called "shell company"? Is it just that their name isn't easily associated with the activity of the company?
Paying taxes. In most countries company will pay taxes on income rather than revenue. They can use shell company to create an invoice that your real company will pay. This way you will channel all your profits out to the country with no taxes.
Hiding true ownership. You can give % of shares to a politician in exchange for a law that will directly benefit you. Politician will be able to monetize on this once he is out of office.
Anti-monopoly regulations. You can own two companies that on paper are competition but in reality are same entity blocking any other company from entering the market.